How crisis-ready organizations can operate more effectively in today’s environment

From crisis awareness to crisis readiness

Board members around the globe have confidence in their organizations’ ability to deal with crisis situations. But a closer look suggests that this confidence is not based on sound evidence, and that they still have a way to go on their journey to being truly crisis-ready.

A new survey conducted by Forbes Insights on behalf of Deloitte Touche Tohmatsu Limited, interviewing over 300 board members worldwide, finds that more than three-quarters (76 percent) of board members believe their companies would respond effectively if a crisis struck tomorrow. But less than half of their companies have taken steps to be truly crisis-ready.

Key findings

Key findings

Key findings

Moving forward: deciding today to be resilient tomorrow

For any organization, crisis is a matter of ‘when’, not ‘if’. Because the damage from a crisis can cut deep and last long, the ability to lead in a crisis must increasingly become a core competence for CEOs, senior executives, and board members. This competence can only be acquired through training, rehearsals, and direct experience of crisis situations.

Based on the survey’s findings and many corporations’ real-world experience in crisis management, there are a number of steps that board members can take to accelerate their progress on the journey from crisis awareness to crisis readiness:

Build crisis capabilities into the membership and structure of the board
Real-world experience with a past crisis can be a strong credential when searching for new directors.

Build crisis awareness into everyone’s job description
Every board member should recognize that crisis isn’t always something you can delegate. They should be ready to apply special skills like PR, risk management, or social media when needed. Long before the need emerges, board members should make time for joint planning committees, simulations, and other time investments that will pay off later. During a crisis, the board’s governance and engagement with shareholders can be critical. And when the worst moments are past, the effort that goes into investigations and independent reviews can help head off future trouble.

Define the crisis organization
Dealing with a crisis is not the same as dealing with daily operations. Up and down the line and across the many silos inherent in most organizations, the ‘organization within the organization’ that will swing into action has to be ready. A plan won’t work if people don’t know about it. Key players can’t play their role if no one has defined that role.

Insist on specifics
As the survey showed, recognizing a threat and preparing for it are two different things.
Board members should expect to see specific plans for handling each of the scenarios that might threaten their organizations. They should participate in testing those specifics against their best knowledge of what may happen and what the company is capable of.

Keep the lines open
It’s a common mistake to think crisis management is all about communication.
But it can be a costly mistake to underperform in that area. The role of communicaton in a crisis doesn’t begin with pre-drafted press releases or mea culpas under the spotlight.
It starts much earlier, when an organization works inside its walls to promote shared understanding of risks and responsibilities. And outside its walls, where listening to and engaging with key influencers, stakeholders, and customers will help the board to look at the situation from the outside in.

Embrace the board’s role as the guardian of reputation
This is a high-level commitment that includes all the details above, but it’s also a distinct understanding. An organization’s reputation is a priceless asset. It can take years to build, but can be lost in a moment. Everyone who has any kind of authority over preventing that damage derives that authority from the board ― and only the board can engage the right decision-makers, establish the requisite communications strategy, and set the necessary tone.

“More than three-quarters of board members believe their companies would respond effectively if a crisis struck tomorrow.”

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Partner

Gerrie serves as a partner and the leader of Crisis Management as well as Reputation Services for Deloitte Netherlands. He has over 19 years of experience in a variety of jurisdictions and industries,... Meer

Director

At Deloitte The Netherlands I lead the crisis and resilience practice within Strategic & Reputation Risk. I focus on and specialise in designing, implementing and evaluating crisis management and busi... Meer

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